Contingent Liabilities, Failure to Achieve Synergies and Impairment Risk Following M&A
First written in FY2021-Q2. 4 of 14 entries say "Restated". Latest entry: FY2026.
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
- FY2026MaterialisedAnnual report
「Because it became unlikely that the business plan would be achieved during the current consolidated fiscal year, the company recognized an impairment loss on its shares in G-gen in its non-consolidated financial statements. Accordingly, in its consolidated financial statements, it recognized the amortization of goodwill as an extraordinary loss pursuant to Paragraph 32 of the Practical Guidance on Capital Consolidation Procedures in Consolidated Financial Statements (Accounting Standards Board of Japan Guidance No. 4, 1 July 2024).」
As it became unlikely that G-gen would achieve its business plan, the company recognized ¥742.966 million in goodwill amortization as an extraordinary loss. The failure to achieve the post-M&A business plan and synergies, along with the impairment risk, has materialized in the full-year results. - FY2026-H1MaterialisedAnnual report
「Because it became unlikely that the business plan would be achieved during the current interim consolidated accounting period, the company recognized an impairment loss on its shares in G-gen in its non-consolidated financial statements. Accordingly, in its consolidated financial statements, it recognized the amortization of goodwill as an extraordinary loss pursuant to Paragraph 32 of the Practical Guidance on Capital Consolidation Procedures in Consolidated Financial Statements (Accounting Standards Board of Japan Guidance No. 4, 1 July 2024).」
As it became unlikely that G-gen would achieve its business plan, the company recognized ¥742.966 million in goodwill amortization as an extraordinary loss following the impairment of the shares. The failure to achieve the post-M&A business plan and synergies, along with the impairment risk, has materialized. - FY2025RestatedAnnual report
「With respect to goodwill, we assess the progress made toward achieving the business plan and other factors to identify indications of impairment. Although we determined that there were no indications of impairment during the current consolidated fiscal year, the goodwill may be affected by changes in the uncertain future economic environment and other factors, which could have a material impact on the consolidated financial statements for the following consolidated fiscal year.」
With respect to goodwill arising from M&A, ¥797.330 million of goodwill related to G-gen was recognized. While the company determined that there were no indications of impairment during the current period, it reconfirmed the possibility that valuations may change due to future economic conditions and business plans. - FY2024-Q1MitigatedAnnual report
「It has been determined that no contingent acquisition consideration (earn-out consideration) will arise. Accordingly, there will be no change in the acquisition consideration and no additional goodwill will arise.」
The previously unfinalized earn-out consideration related to the acquisition of Topgate will not arise, eliminating the risk of a change in acquisition consideration and the recognition of additional goodwill. - FY2023Finalization of goodwill and contingent consideration after the acquisitionAnnual report
「The goodwill recognized was ¥1,087.268 million. ... Although we determined that there were no indications of impairment during the current consolidated fiscal year, the goodwill may be affected by changes in the uncertain future economic environment and other factors, which could have a material impact on the consolidated financial statements for the following consolidated fiscal year.」
Goodwill of ¥1,087.268 million was recognized in connection with the acquisition of Topgate, and the company determined that there were no indications of impairment during the current period. At the same time, it disclosed the possibility that valuations may change due to future business plans and economic conditions. The earn-out consideration has not yet been finalized. - FY2023-Q2Details of acquisition-related termsAnnual report
「The acquisition consideration does not include contingent acquisition consideration. Under the agreement, contingent acquisition consideration (earn-out consideration) of ¥200 million will arise depending on performance over a specified period, but the amount has not been finalized at this time.」
The disclosure states that, upon completion of the acquisition of Topgate, earn-out consideration of up to ¥200 million may arise depending on performance. It also states that goodwill of ¥1,087.268 million is a provisional amount because the purchase price allocation has not been completed. - FY2023-Q1Specific risks emerging following an acquisitionAnnual report
「Under the agreement, contingent acquisition consideration (earn-out consideration) of ¥200 million will arise depending on performance over a specified period, but the amount has not been finalized at this time.」
The disclosure specifically states that, in connection with the acquisition of Topgate, contingent acquisition consideration of up to ¥200 million based on performance has not been finalized, and that the amounts of the acquired assets and liabilities and goodwill have also not been finalized at this time. - FY2022RestatedAnnual report
「Following an acquisition, the group's operating results could be affected by the emergence of unforeseen contingent liabilities, failure to achieve the synergies or business expansion results anticipated by the group due to changes in the business environment, and the resulting recognition of impairment losses.」
The company reconfirms the risks of contingent liabilities following M&A, failure to achieve synergies or business expansion results, and the recognition of impairment losses. - FY2021RestatedAnnual report
「Following an acquisition, the company's operating results could be affected by the emergence of unforeseen contingent liabilities, failure to achieve the synergies or business expansion results anticipated by the company due to changes in the business environment, and the resulting recognition of impairment losses.」
The company reconfirms the risks of contingent liabilities following M&A, failure to achieve synergies or business expansion results, and the recognition of impairment losses. - FY2021-Q3RestatedAnnual report
「Following an acquisition, the company's operating results could be affected by the emergence of unforeseen contingent liabilities, failure to achieve the synergies or business expansion results anticipated by the company due to changes in the business environment, and the resulting recognition of impairment losses.」
The company reconfirms the risks of contingent liabilities following M&A, failure to achieve synergies or business expansion results, and the recognition of impairment losses. It does not state that an acquisition has been made or that any of these risks have materialised. - FY2021-Q2First statedAnnual report
「Following an acquisition, the company's operating results could be affected by the emergence of unforeseen contingent liabilities, failure to achieve the synergies or business expansion results anticipated by the company due to changes in the business environment, and the resulting recognition of impairment losses.」
For M&A, the company identifies as new risks the emergence of contingent liabilities following an acquisition, failure to achieve synergies or business expansion results due to changes in the business environment, and the recognition of impairment losses.